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[2012] ZAECPEHC 32
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Macrovest 102 (Pty) Ltd t/a Business Intelligence and Mazizi v Municipal Manager of the Nelson Mandela Metropolitan Municipality and Others (467/2012) [2012] ZAECPEHC 32 (22 May 2012)
IN
THE HIGH COURT OF SOUTH AFRICA NOT REPORTABLE
EASTERN
CAPE, PORT ELIZABETH
Case No.: 467/2012
Date Heard: 11 May 2012
Date Delivered: 22 May 2012
In the
matter between:
MACROVEST 102 (PTY) LTD t/a BUSINESS
INTELLIGENCE AND MAZIZI
…........................................................................
Applicant
and
THE MUNICIPAL MANAGER OF THE NELSON
MANDELA BAY METROPOLITIAN
MUNICIPALITY
…..................................................................................
First
Respondent
THE BID ADJUDICATION COMMITTEE
OF THE NELSON MANDELA BAY
METROPOLITIAN MUNICIPALITY
…..............................................
Second
Respondent
THE NELSON MANDELA BAY
METROPOLITIAN MUNICIPALITY
…..................................................
Third
Respondent
BUSINESS CONNEXION (PTY) LTD
….............................................
Fourth
Respondent
EPWEB ICT SOLUTIONS
…..................................................................
Fifth
Respondent
JUDGMENT
___________________________________________________________________
EKSTEEN
J:
[1] On 23 February 2012 the
applicant launched this application. In its notice of motion it
sought a rule
nisi
coupled with a interim interdict preventing
the first, second and third respondents from awarding a tender
pending the finalisation
of the review proceedings (Part A), an order
granting it access to documentation relating to decisions taken in
respect of the
tender process (Part B), and, in due course, an order
reviewing and setting aside any decision taken in respect of the
award of
the tender (Part C).
[2] The relief foreshadowed in the
original notice of motion in Part C thereof was in the following
terms:
“
1.
An order reviewing and setting aside, alternatively declaring
unlawful, any decision of the First, Second and/or Third Respondents
to award the aforementioned Tender to either the Fourth or Fifth
Respondents.
2.
An order directing the First Respondent to award the aforesaid Tender
to the Applicant, and a further order compelling the First
Respondent
to sign such documentation and such contracts as may be necessary to
give effect to the award of the said Tender.”
Section 8
of the
Promotion of
Administrative Justice Act, 3 of 2000
, empowers the court, however,
to grant any order in review proceedings which is just and equitable,
including an order setting
aside the administrative action and
remitting the matter for reconsideration by the administrator.
[3] On 15 February 2012 the first,
second and third respondents served a notice of their intention to
oppose the application in
all its parts. The first, second and third
respondents, however, failed to file any opposing papers and on the
morning of the hearing
of Part A and B of the notice of motion the
first, second and third respondents withdrew their opposition to
Parts A and B and
filed a notice to abide the decision of this court
in respect of these portions of the notice of motion. The fifth
respondent,
on the other hand, not only gave notice of its intention
to oppose, but filed papers opposing the relief sought in Parts A and
B of the notice of motion and, notwithstanding the first, second and
third respondents’ decision not to persist in their opposition,
continued vehemently to oppose the granting of any relief. The fourth
respondent did not enter an appearance to oppose.
[4] Although the first, second,
third and fifth respondents were before court and the question of an
interim interdict was fully
argued at the first appearance, I
nevertheless granted a rule
nisi
as the fourth respondent had
not entered an appearance. On 8 March 2012 the following order was
made:
“
1(a)
A rule
nisi
will issue returnable on 5 April 2012 at 10h00, or as soon thereafter
as Counsel may be heard, calling upon the Respondents to
show cause,
if any, why a final order should not be granted:
(i)
That the First, Second and Third Respondents be interdicted from
awarding the September 2011 Financial Management Tool Tender
(tender
number SCM337/2011-2012)(the “tender”) to the Fourth or
Fifth Respondents and interdicting the First, Second
and Third
Respondents from concluding any agreements with the Fourth or Fifth
Respondents to perform any work in terms of the tender
until the
final determination of the pending review application.
(ii)
That the Third Respondent pay the costs occasioned by this
application, alternatively, that the Third Respondent, jointly and
severally with such further Respondents as may oppose the
application, pay the costs of the application.
(b)
The order referred to in paragraph 1(a) above shall operate as an
interim interdict with immediate effect pending the return
day of the
rule
nisi
.
(c)
The Third Respondent and the Fifth Respondents are ordered, jointly
and severally, the one paying the other to be absolved,
to pay the
costs occasioned by the application for the interim interdict
referred to in paragraph 1(b) above.
2(a)
The First, Second and Third Respondents are ordered to provide to the
Applicant, subject to paragraph 2(b) below, within three
(3) weeks
from the date of this order, all documentation relating to decisions
taken in respect of the aforesaid tender, which
documentation is to
include the following:
(i)
All minutes of the Bid Evaluation and Bid Adjudication Committees,
including all reports, memoranda, score sheets, tender responses
and
other documents forming a party of such minutes and reports;
(ii)
All reports, memoranda and other relevant documents submitted to the
said committees by the municipal officials, directorates
and
departments concerning the aforesaid tender;
(iii)
All written reports and recommendations of the Bid Evaluation and Bid
Adjudication Committees concerning the aforesaid tender;
(iv)
All written decisions and memoranda prepared by or on behalf of the
Acting Municipal Manager of the Third Respondent in connection
with
the aforesaid tender;
(v)
All reasons relating to any decision taken in connection with the
aforesaid tender, whether by the First or Second Respondent;
and
(vi)
All minutes of the council of the Third Respondent and mayoral
committees and sub-committees in connection with the aforesaid
tender.
(b)
The First, Second and Third Respondents are directed to exclude from
the aforestated documentation, alternatively, to block
out in the
aforesaid documentation all information supplied by the Fourth
Respondent and/or the Fifth Respondent in their bids
which may put
either of the said Respondents at a disadvantage in the bid process
or prejudice them in commercial competition and
in particular the
First, Second and Third Respondents are ordered to omit or delete any
information relating to the pricing structures
of the Fourth
Respondent and the Fifth Respondent’ bid.
(c)
The costs occasioned by the application for access to information and
reasons are reserved.”
[5] The rule and the interim
interdict were subsequently extended to 10 May 2012. This is then the
extended return day of the rule.
[6] On 11 April 2012 the first,
second and third respondents delivered the documentation referred to
in paragraph 2 of the order
of 8 March 2012 (the documents record).
The evaluation criteria contained in the tender invitation provide
that tenders are conditional
on each bidder’s “functionality
pre-evaluation points, totalling 100 points, and only tenderers
scoring a total of
60% (60 points) or higher will be evaluated
further”. Tenderers “price points” and “preference
points”
will accordingly not be evaluated and scored unless
such tenderer has achieved 60% for its “functionality
pre-evaluation
points”. The documents record revealed that four
bids had been received in response to the third respondent’s
invitation
to tender, being that of the applicant, the fourth
respondent, the fifth respondent and a further bid from Mars
Technology. The
bid by Mars Technology had been rejected as
non-responsive at a pre-evaluation meeting even before the bids were
submitted to the
third respondent’s Bid Evaluation Committee.
The applicant’s bid had been eliminated at the first hurdle by
the Bid
Evaluation Committee as it was adjudged not to meet the
minimum functionality requirement of 60% set in the evaluation
criteria.
It was accordingly not further evaluated with reference to
its price structures and the preference criteria set out in the
evaluation
criteria. The bids of the fourth and fifth respondents
were further considered by the bid evaluation committee and by the
second
respondent and the second respondent ultimately recommended to
the first respondent to award the tender to the fifth respondent.
[7] This is precisely what the
applicant in its initial papers had contended had occurred and which
it contended had wrongfully
occurred.
[8] On 24 April 2012 after
consideration of the documents record, the applicant filed and
delivered its further affidavits for purposes
of the review
application,
Part C
of the notice of motion, as it was entitled to do
in accordance with the provisions of Rule 53 of the Uniform Rules of
Court.
[9] In its further affidavits, the
applicant alludes to the third respondents tender invitation and the
evaluation criteria set
out therein. The functionality pre-evaluation
was performed by the Bid Evaluation Committee and the documents
record reveals that
the Bid Evaluation Committee was comprised of
five members being as follows:
Chairperson: Mr R Williams
Committee Member: Ms N Mzinzi
Committee Member: Mrs N C Ngxesha
Committee Member: Mr A F Hiscock and
Project Manager: Ms T Jonas
[10] Each of these members scored
each of the tenderers on the strength of their bids. The score cards
revealed that initially Ms
Jonas scored the applicant at 75%, Mr
Williams 45%, Ms Ngxesha 50%, Mr Hiscock 80% and Ms Mzinzi 50%.
Notwithstanding the very
considerable disparity which exists between
the scoring of Ms Jonas and Mr Hiscock on the one hand, and that of
Mr Williams, Ms
Ngxesha and Ms Mzinzi on the other, the applicant
would nevertheless have achieved 60%. The score cards however, reveal
that the
scores originally allocated by Mr Williams and Ms Mzinzi
were further altered, in the case of Mr Williams, to reduce the
applicant’s
functionality score from 45% to 35 % and in the
case of Ms Mzinzi to reduce the score allocated from 50% to 45%. This
the applicant
suggests was irrational and was done to eliminate the
applicant from the process.
[11] The applicant argues in its
further affidavits, largely on the strength of the aforegoing, that
the Bid Evaluation Committee’s
assessment and scoring of the
applicant’s functionality requirement is clearly incorrect and
its decision to eliminate the
applicant from the tender process is
unreasonable, irrational and arbitrary as the applicant had since
August 2005 designed the
third respondent’s Financial
Management Tool and has furthermore since then successfully
developed, supported and maintained
the system on behalf of the third
respondent. I pause to record that in argument before me it is
further contended that in the
event that the matter is referred back
to the third respondent Mr Williams, Ms Mzinzi and Ms Ngxesha should
be disqualified from
further participation in the evaluation process.
I shall revert to this issue below.
[12] Notwithstanding the formulation
of the notice of motion to which I have referred earlier, the
applicant declares the objective
of its application in its further
affidavit as follows:
‘
The
Applicant simply seeks that its tender response, in particular its
“
Functionality
”
requirement, “
Price
Points
”
and “
Preference
Points
”,
be referred back to the Bid Evaluation Committee, the Second
Respondent and the First Respondent and be considered, evaluated
and
scored with other bidders’ tender responses; and that the
Tender be awarded fairly by the First Respondent to the bidder
with
the highest “
Price
Points
”
and “
Preference
Points
”
scores.’
[13] On 25 April 2012, after
delivery of the further affidavits, the first respondent addressed a
letter (the letter) to the applicant,
fourth respondent and fifth
respondent, and presumably also to Mars Technology in which he
records as follows:
‘
On
my perusal of the report of the Bid Evaluation Committee to the Bid
Adjudication Committee, I noted
inter
alia
the following:
that
Mars Technology was found non-responsive at a “
pre-evaluation
meeting
” held by officials other than the Bid Evaluation
Committee. The Municipality’s Supply Chain Management Policy
contains
no provision for such a pre-evaluation process by officials
other than the Evaluation Committee. Therefore the disqualification
of Mars Technology by those officials offends the Supply Chain
Management Policy;
furthermore,
the Evaluation Committee was tasked to evaluate tenderers on
functionality and to allocate points based on previous
experience in
related industry, personnel component, project management
capabilities and comprehensiveness of tender requirements.
It was
further stipulated in the tender conditions that only the tenderers
who attained a score of 60% or higher, qualify for
further
evaluation. In my view, the fact that one of the tenderers, Mars
Technology was marked “
non-responsive
” and
disqualified by officials who had no power to do so, violated and
contravened the Municipality’s Supply Chain
Management Policy.
Consequently
and based on the powers vested upon me, in terms of clause 29(6) of
the Municipality’s Supply Chain Management
Policy, I have
decided to refer the Evaluation Committee’s recommendation back
to the Bid Evaluation Committee for reconsideration.
The
Bid Evaluation Committee is now constituted by new members and I have
instructed the Evaluation Committee to reconsider whether
all the
tenderers who had submitted their tenders on or before the closing
date (22 September 2011) in respect of the relevant
tender were
responsive or not, and further to evaluate all those tenderers who
are found to be responsive in accordance with the
tender
specifications. The evaluation will also involve evaluation on
functionality which requires a tenderer to attain a score
of at least
60% on functionality in order for that tender to be evaluated further
on pricing and HDI component.’
[14] If what is recorded in the
letter has indeed occurred then, the applicant contends that it has
achieved precisely what it had
set out to achieve, as declared in the
further affidavit, namely, that its tender response be referred back
to the Bid Evaluation
Committee, the second respondent and the first
respondent and be considered, evaluated and scored with other
bidders’ tender
responses and that the tender be awarded fairly
by the first respondent. In these circumstances the applicant
contends that the
first, second and third respondents have
essentially conceded the main relief sought by it in review.
[15] In argument before me the
applicant accordingly seeks an order that the first, second and third
respondents remit the applicant’s
tender response to the third
respondent’s Bid Evaluation Committee for reconsideration and
recommendation, and that the second
respondent should evaluate the
recommendation of the third respondent’s Bid Evaluation
Committee and submit its recommendation
to the first respondent.
[16] The documents record shows that
a final award of the tender has not been made. Mr
Gqamana
on
behalf of the first, second and third respondent argues, reliant on
the letter, that whatever the merit of previous decisions
may have
been, the first respondent has now exercised the power which is
vested in him in terms of clause 29(6) of the third respondent’s
Supply Chain Management Policy and he has remitted the matter back to
the Bid Evaluation Committee to commence the process afresh.
On this
basis it is argued that the process is now before the Bid Evaluation
Committee and the review has become moot. He contended
accordingly
that I should simply discharge the rule.
[17] The fifth respondent adopts a
similar stance. Mr
Swanepoel
, who appeared on behalf of the
fifth respondent, affirms that the fifth respondent does not oppose
or object to the first respondent’s
remittal of the matter back
to the newly constituted Bid Evaluation Committee and will abide the
outcome thereof. He argues that
the remittal by the Municipal Manager
renders the review academic.
[18] The difficulty, I think, which
the first, second and third respondents have, is that no affidavit
has been filed by or on behalf
of any of them. The content of the
letter has not been confirmed on oath and the letter has no
evidential value on its own. Mr
Gqamana
has, however,
confirmed that his instructions accord with the content of the
letter. He conceded accordingly, correctly in my view,
that in the
absence of an affidavit by the first respondent to confirm that the
remittal has occurred it would be appropriate to
make an order that
the matter be referred back to the Bid Evaluation Committee for the
process to commence afresh. No purpose would
be served in postponing
the review application further in circumstances where the parties are
in agreement in respect of the further
conduct of the process.
[19] Initially Mr
Gqamana
resisted the order sought by the applicant to exclude Mr Williams, Ms
Mzinzi and Ms Ngxesha from the process, however, after obtaining
specific instructions in respect of the composition of the proposed
newly constituted Bid Evaluation Committee, Mr
Gqamana
advised
that the first, second and third respondents do not intend to include
these persons on the new Bid Evaluation Committee
and have no
objection to the granting of such an order. He remained, however,
firmly opposed to the form of the remainder of the
order sought by
the applicant.
[20] Mr
Swanepoel
, on behalf
of fifth respondent, was similarly opposed to the order sought by the
applicant at the hearing. Suffice it to say that
I think that there
is merit in much of the criticism raised by Mr
Gqamana
and Mr
Swanepoel
, however, by virtue of the concession made by Mr
Buchanan
, on behalf of the applicant, in reply I do not think
that it is necessary to deal in any detail with these objections. It
was submitted
on behalf of the fifth respondent that in the event of
an order being made the respondents should simply be directed to
consider
the competing tenders of all tenderers in accordance with
the applicable laws, regulations and the procurement policy of the
third
respondent and in accordance with the requirements of section
217 of the Constitution. I think that this would adequately protect
the interests of all parties and Mr Buchanan did not contend
otherwise.
[21] What remains for determination
is the costs of the application, save those costs which have
previously been adjudicated.
[22] On behalf of the applicant it
is argued that the content of the letter by the first respondent is
essentially a concession
of the main relief sought in review. It is
true that in the initial notice of motion the applicant sought an
order that the tender
be awarded to it. Notwithstanding this prayer,
upon filing the further affidavits after the delivery of the
documents record the
applicant set out its objective, which I have
recorded earlier.
[23] The delivery of the further
affidavits was followed the very next day by a letter which records
that the first respondent has
done precisely that which the applicant
declared that it seeks. I think that the applicant is justified in
concluding that the
letter constitutes a concession of the main
relief sought in the review application. At the hearing before me,
all were agreed
that no purpose could be served in the further
pursuit of the review application. I am of the view that the
applicant has achieved
substantial success. It follows that I think
that the applicant is entitled to an order for its costs, including
the costs of two
counsel.
[24] Mr
Buchanan
contends
that the third respondent should be liable for these costs. The fifth
respondent, for its part, contends not only that
fifth respondent
should not be liable for the applicant’s costs, but indeed that
the third respondent should be liable for
its costs too.
[25] Mr
Swanepoel
argues that
adjudication of a tender process by a local authority places upon
officers in its employ constitutional obligations
which are further
fleshed out in various statutes and in the third respondent’s
Supply Chain Management Policy. At the time
that the application was
launched the fifth respondent had no knowledge of the process which
was internal to the third respondent’s
structures. The first,
second and third respondents, so it is argued, consistently indicated
their intention to persist in opposing
the review application.
Reliant on all these features it is contended that the fifth
respondent was entitled to assume that the
integrity of the process
was intact and that no irregularity had been committed. The fifth
respondent was accordingly entitled
to actively oppose the relief
sought to protect its interests.
[26] The letter, which only emerged
on 25 April 201, records a breach of the Supply Chain Management
Policy which had occurred some
seven months prior to the date of the
letter and which had not previously been revealed. Mr
Swanepoel
argues that the failure on the part of the first and third
respondents to state the correct position timeously, transparently
and accurately, contravenes its constitutional obligations and is
worthy of censure. This shortcoming extends to the litigation
itself,
so the argument goes, in that the first, second and third respondents
failed to disclose the correct position to the parties
and to the
court and in particular, failed to instruct their counsel and
attorney as to what the correct factual position was at
the time when
the matter was heard on an urgent basis on 29 February 2012, with the
fifth respondent especially in the dark at
the time. This is
compounded by the failure of the first respondent now to explain
under oath what the true position was and in
particular, to explain
the delay in not doing anything to rectify the position from the
inception of the matter to the date of
the letter being 25 April
2012.
[27] The matter does not end there.
Reliance is placed also on the events which occurred subsequent to
the order made on 8 March
2012. I ordered the delivery of the
documents record within a specified time frame and made a particular
order that certain information
confidential to the fifth respondent
should not be disclosed. The fifth respondent contends that the
complete record was only produced
on 23 April 2012 and, contrary to
the order made, the confidential information expressly referred to in
the order was delivered
to the applicant.
[28] I am in full agreement with Mr
Swanepoel
that these matters are indeed cause for concern. In
Abdi and Another v Minister of Home Affairs
and
Others
2011 (3) SA 37
(SCA) Bertelsmann AJA stated at p. 54:
“
[36]
Our courts have on several occasions expressed their disquiet at the
failure of government officials, including the Department's
officials, to respect the rights of individuals they deal with and to
act in accordance with their duties imposed by the Constitution:
Eveleth
v Minister of Home Affairs and Another
2004
(11) BCLR 1223
(T) paras 45 to 48;
Nyathi
v MEC for Department of Health, Gauteng and Another
2008
(5) SA 94 (CC)
[2008] ZACC 8
;
(2008 (9) BCLR 865)
;
Total
Computer Services (Pty) Ltd v Municipal Manager, Potchefstroom Local
Municipality, and Others
[2007] ZAGPHC 239
;
2008
(4) SA 346
(T)
para 21;
Van
Straaten v President of the Republic of South Africa and Others
2009
(3) SA 457 (CC)
. In the present instance the respondents'
officials failed to understand the very object and purpose of the Act
it was their duty
to apply, causing unnecessary litigation and wasted
costs. …”
[29] I am in agreement with the
sentiments expressed therein and I think that these comments are
apposite to the present matter.
In this case the disquiet is
compounded by the third respondent’s disregard for the order of
court not to reveal the information
confidential to fifth respondent.
[30] Mr
Gqamana
, on behalf of
the first to third respondents, resists the granting of a costs order
against the first, second and third respondents
in favour of the
fifth respondent. He was constrained to concede the seriousness of
the shortcomings, however, he submits that
these shortcomings should
not operate to benefit of the fifth respondent in the manner
contended.
[31] I think that there is merit in
Mr
Gqamana’s
submission. There is no lis between the
first, second and third respondents on the one hand and the fifth
respondent on the other.
The fifth respondent took a conscious
decision that it intended to oppose the application launched by the
applicant. The applicant
alleged expressly that the first, second and
third respondents had breached their constitutional obligations. The
very foundation
of the fifth respondent’s argument in this
regard is that it had absolutely no knowledge as to the correctness
or otherwise
of these allegations. I do not think that in those
circumstances that the fifth respondent can be justified in entering
into litigation
on the assumption that the applicant’s
averments would prove in due course to be unsound. It entered into
the litigation
with the full knowledge that the applicant sought a
costs order against the third respondent jointly and severally with
such further
respondents who choose to oppose the application.
[32] In all the circumstances I
would, but for what is set out below, have been inclined to order
that the third respondent and
the fifth respondent pay the costs
occasioned by the application jointly and severally, the one paying
the other to be absolved.
That, however, would not take account of
the third respondent’s breach of the order issued on 8 March
2008 to which I have
alluded above. I am in agreement with Mr
Swanepoel
that this conduct is worthy of censure. For the
reasons set out above I do not, however, consider that it justifies a
costs order
in favour of the fifth respondent. In all the
circumstances I consider it appropriate that an order be made that
the third respondent
on its own pays the applicant’s costs
occasioned by the application, save such costs which have previously
been determined.
[33] In respect of the costs order
which I had made against the fifth respondent on 8 March 2012, Mr
Swanepoel
has referred me to
Safcor Forwarding (Pty) Ltd
v NTC
,
1982 (3) SA 654
(A) particularly at p. 676. Mr
Swanepoel
argues on the strength hereof that I should revisit
the costs order previously made. Suffice it to say that I do not
consider this
authority to entitle me to revisit a final costs order
previously made. In any event, even if I was entitled to do so and I
was
called upon at this stage of the proceedings to reconsider the
costs occasioned by the interim interdict, I would again make the
same costs order which I had previously made. I have recorded above
that I consider that the concession contained in the letter
dated 25
April 2012 by the first respondent constitutes a concession of the
main relief sought in the review proceedings. I have
accordingly
found, in effect, that the applicant has indeed achieved
substantially what it sought to achieve by the institution
of the
application. In those circumstances it seems to me that the
institution of the application and the interim interdict protecting
the
status quo
up until the concession made on 25 April 2012
were justified. The fifth respondent actively opposed this relief
and, at that time,
also the review.
[34] In the result I make the
following order:
1. The rule
nisi
is
discharged.
2. It is ordered that the first and
third respondents remit the applicant’s tender response,
together with all other tender
responses received, to the third
respondent’s Bid Evaluation Committee to commence the Bid
Evaluation procedure afresh.
3. The first, second and third
respondents are directed to reconsider competing tenders of the
applicant, the fourth respondent,
the fifth respondent and Mars
Technology in accordance with all applicable laws, regulations and
the procurement policy of the
third respondent and in accordance with
the requirements of section 217 of the Constitution.
4. It is ordered that Mr R Williams,
Ms N Mzinzi and Ms N C Ngxesha are to be excluded from the Bid
Evaluation process.
5. The third respondent is ordered
to pay the applicant’s costs of the application including the
costs of two counsel.
_______________________
J W EKSTEEN
JUDGE OF THE HIGH COURT
Appearances:
For Applicant:
Adv R Buchanan
SC, instructed by van Wyk Attorneys, Port Elizabeth
For 1
st
,
2
nd &
3
rd
Respondents :
Adv Gqamana,
instructed by Ketse Nonkwelo Incorporated, Port Elizabeth
For 4
th
Respondent: No
appearance
For 5
th
Respondent:
Adv M Swanepoel SC, instructed by Schoeman
Oosthuizen Incorporated, Port Elizabeth